The single-family rental market has grown by 5 million from 2006 to 2017 – wiping out 270,000 potential home sales annually
The single-family rental market has grown by 5 million from 2006 to 2017 – wiping out 270,000 potential home sales annually.
An analysis by Zillow considered the impact on the nationwide home inventory and calculated that booming rental market meant a 5% decline in for-sale inventory each year.
The figures reveal that 120,000 of the total lost sales would have been the starter homes desperately sought by first time buyers. In the past 5 years, almost 40% of the single-family homes bought and converted to rentals have been starter homes.
A major reason for the rental surge was the financial crisis as mortgage borrowers who lost their homes were forced into rentals. The share of single-family homes that were rented out jumped from 13% in 2007 to 19.2% in 2016.
There’s still strong demand for single-family homes to rent with 45% of renters wanting one but only 28% finding an available home.
"The combination of foreclosures and growing rental demand following the housing crash was an attractive opportunity for investors – large and small – who were able to buy foreclosed homes and use them to meet the rental demand. At the same time, many long-time owners have opted to hold onto their homes as rentals even after they decide to move somewhere else,” said Zillow senior economist Aaron Terrazas.
An analysis by Zillow considered the impact on the nationwide home inventory and calculated that booming rental market meant a 5% decline in for-sale inventory each year.
The figures reveal that 120,000 of the total lost sales would have been the starter homes desperately sought by first time buyers. In the past 5 years, almost 40% of the single-family homes bought and converted to rentals have been starter homes.
A major reason for the rental surge was the financial crisis as mortgage borrowers who lost their homes were forced into rentals. The share of single-family homes that were rented out jumped from 13% in 2007 to 19.2% in 2016.
There’s still strong demand for single-family homes to rent with 45% of renters wanting one but only 28% finding an available home.
"The combination of foreclosures and growing rental demand following the housing crash was an attractive opportunity for investors – large and small – who were able to buy foreclosed homes and use them to meet the rental demand. At the same time, many long-time owners have opted to hold onto their homes as rentals even after they decide to move somewhere else,” said Zillow senior economist Aaron Terrazas.
